Annual Report 2012 - APG|SGA

4 Report of the Chairman and the CEOContinued rigorous adjustmentof foreign investments.completely compensate for the considerable additional salesobtained in election year 2011 (National Council and Council ofStates) and even significantly exceed last year’s sales. Taking thisinto consideration, but also in light of local development onthe overall advertising market 1 of -0.1%, this 5.9% increase insales provides proof of the compelling performance of our salesorganization. With respect to other media categories, Out ofHome media in general and our company in particular haveacquired new market shares based on acomparison betweenmedia. Another positive aspect to note is the fact that all of theAPG|SGA segment companies in Switzerland exceeded theirtargets both with regard tosales performance and their contributionto the company’s overall results. In the Switzerlandsegment, sales revenue increased by 5.9% to atotal of CHF297.0 million compared with the previous year, while EBITDAincreased to CHF 115.4 million. This corresponds to an increaseof 60.7% compared with the previous year. This strong increasewas also positively influenced by conversion of the pensionfund from adefined benefit to adefined contribution plan.Net income amounted to CHF 77.6 million in total.In the year under review, APG|SGA was once again able to acquireorextend numerous agreements with cities, municipalities,transportation companies, corporate partners and private partners.In open, transparent and professionally conducted bids andRFQs, the company’s range of products and services convincedcustomers both through attractive financial terms and conditionsand high quality, reliability and service orientation. Our corporatepolicy, which is aimed at long-term partnerships, and identificationwith our customers in our daily work, is also particularlyimportant for public authorities and transportation companies.At the same time, we attach great importance to all mattersinvolving sustainability and conscientious handling of resources.In this regard, our company is considered to be aleader in themedia industry. For example, APG|SGA invests substantialamounts in sustained reduction of carbon dioxide emissions,operates one of the largest environmentally friendly car fleets(natural gas/hybrid) in Switzerland and relies completely ongreen electricity.Other special items that are particularly noteworthy in thereport for 2012 include the award ofacontract in achallengingpublic bid for management of 1,255 poster spaces on publicpremises in the city of Zurich for an additional five years, as wellas further development of the partnership between APG|SGATraffic and PostAuto Schweiz AG –for which advertising spacesat transit stops are now marketed in addition to advertising inand on the respective vehicles. APG|SGA Mountain was able tosuccessfully conclude various agreements with mountain regionsand railways, including Zermatt Bergbahnen AG, BettmeralpBahnen AG, and Jungfraubahnen Management AG. WithStartower, APG|SGA launched anew illuminated advertisingcolumn that revolves on its own axis and which will be used atexclusive urban locations. Our Digital Competence Center andDigital Sales divisions are inclose contact with cities, transportationcompanies, shopping centers and other partners in orderto assess the possible uses for high-quality digital products.The ePanels that were already successfully employed in the largestations were also installed at Metro m2inLausanne in thespring. At the main train station in Zurich, the eBoard representsareplacement investment in the largest HD display in Switzerland(60 square meters). All in all, sales in the digital segmentmore than doubled since 2010.International marketsThe decision to withdraw the company from operating activitiesin Greece, Bosnia, Hungary, Bulgaria, and Italy, aswas communicatedtwo years ago within the scope of our revised strategy,was quickly implemented despite adverse economic conditions.In Montenegro, we succeeded in selling our majority interestto the former minority shareholder at the beginning of 2013 andthus withdrawing from this market.Our efforts to sell the companies in Romania could not be realizeddue to the continuing poor market conditions. However, wesucceeded in putting the respective operational units on amuchbetter footing last year. Weare pleased that apositive incomeresult at the operating level was again able to be achieved for2012 thanks to various measures we took, such as reintegratingthe logistics organization, optimization of the advertising inventoryand strengthening the sales organization.In Greece, where wenolonger have any operating activities,the remaining companies will undergo structured liquidation asplanned.In Serbia, comprehensive impairment for the entire goodwill aswell as apart of the value of the respective contracts wasrequired. The company in Serbia is well-positioned in operatingterms. It is the undisputed market leader and has long-termcontracts for marketing amodern portfolio of products and services.In spite of these strengths –which in principle make usoptimistic for the future –the company, asalready mentioned inthe semiannual report, was unable to escape the extraordinarilydifficult macroeconomic environment. The local economic situationis very challenging, and then too there isthe exceptionallyweak Serbian dinar. Despite comparatively good sales performance,which in the local currency nearly achieved the level ofthe previous year, intangible assets had to be adjusted down asareview of their value revealed overvaluation of the carryingamounts.APG|SGA Annual Report 2012